Wellington Property Investors' Association

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wellington@nzpif.org.nz

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19-03-2015

NZPIF in the news in March

On March 5, reporters from six different media channels contacted Andrew King as Executive Officer of the NZPIF.  They were keen to have the NZPIF’s reaction to the Reserve Bank’s announcement that new rules for property investors were on the way. These rules related to creating a specific asset class for property investors and requiring banks to hold more capital as a buffer against loans to these borrowers. The reason given for this action was that borrowers who are property investors present a higher risk in times of economic crisis. Andrew took the opportunity to point out that “rental property loans are actually less risky than many of the loans taken out against homes to fund businesses" (NZ Herald 6 March).  Andrew also said tightening rental lending rules would push up borrowing costs and ultimately increase rents, costing tenants.  (RadioNZ 6 March).   Andrew Bruce and David Whitburn of APIA were also interviewed.  The NZPIF is working on a submission to reach the Reserve Bank by April 7.

On March 9 Andrew King was again interviewed by the NZ Herald, but on rising rents on this occasion. He said that there are three main factors which restrain landlords from increasing their rents. The first is supply and demand. They can't unilaterally increase the rent above the market. Second is the tenants' ability to pay. If they fall into arrears that's a problem for both landlord and tenant. The third factor is inertia. Low interest rates mean existing landlords aren't under financial pressure. "Their cash flow has been good because interest rates are low and they haven't felt the need to put rent up. If interest rates rise, “says King,” rent increases will be quick to follow.”

Phil Twyford’s Healthy Homes Guarantee Bill came before the Parliament on 18th March prompting the National student president Rory McCourt to say that all political parties should get behind this bill because “we just want affordable housing that doesn’t make us sick.”  (Voxy March 19).

Andrew King in media release was able to point out “that NZPIF is not against improvements to rental properties. However people need to realise that improvements come at a cost that some tenants are unwilling to pay. Unfortunately many students are under the impression that regulations forcing rental property owners to maintain minimum standards will not result in them paying higher rents. This is not the case.”  (Media release circulated 19 March). An interview with Newstalk ZB followed.

 

 

 

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